GE Brings Bad Things to Life

For downsized workers in Bloomington, it's time to start thinking globally.

By

January 26, 2001

There are loftier monuments to human progress in Bloomington, Indiana–the Kinsey Institute, the alma mater of one-half the DNA discovery team of Watson and Crick, the site of the original Dog and Pony Show–but nothing so exuberantly represents the excess of American household convenience as the General Electric side-by-side refrigerator-freezer, manufactured exclusively in the city since 1967 in the biggest such factory in the world. This “Cadillac of refrigerators” (up to $2,449 retail) has been rolling off Bloomington assembly lines under the label GE or Hotpoint or the redoubtable Kenmore at a rate of 230 an hour, 4,700 a day, 1.6 million a year. But the mood at the plant is far changed from what it was thirty years ago, when the Bloomington Herald-Telephone ran boosterish photographs of bright-faced GE workers rewarded with checks in the thousands of dollars for their cost-saving suggestions.

This article is part of the Haywood Burns Community Activist Journalism series, sponsored by the New World Foundation and the Nation Institute.

In 1999 plant management announced that profitability was falling, that $65 million in cost savings was needed, and it was the job of members of International Brotherhood of Electrical Workers Local 2249 to come up with the money. When they did, the company said it wasn’t good enough. Half the production would have to be moved to Celaya, Mexico, where instead of $24 an hour in wages and benefits, labor can be bought for $2 an hour. This past December, 733 GE workers in Bloomington were cast off; in the next few months hundreds more will be out of a job and hard put to match their income and benefits anyplace else in town. When it’s all over, 1,400 of the plant’s 3,200 jobs will be gone.

GE is the largest manufacturer in Bloomington, but in times of “prosperity,” stories like this one don’t tear through a town the way they did in the 1980s. Bloomington’s official unemployment rate is 1.1 percent. Hoosier basketball coach Bobby Knight lost his, but jobs are in greater number than ever. The city’s biggest employer, Indiana University, is expanding; its newest offering, a School of Informatics for the techno age. Real estate is moving at a rapid clip, and the signposts of development are everywhere as this “Crossroads of America” town increasingly becomes a destination for tourists, well-off retirees and small high-tech companies. But there’s a bitter wind blowing through the boom. Over the past two years 3,665 well-paid factory jobs have left Bloomington. In Indiana as a whole, since 1994, 15,000 workers a year on average have lost their jobs. The most passionate political dispute in town involves what environmentalists, rural preservationists and others call “the NAFTA highway,” a proposed Interstate extension that would put Bloomington on a high-speed freight route from Canada to Mexico. The United Way’s Josh Cazares, who also coordinates the local Jobs With Justice, tells of full-time workers taking supplemental part-time gigs, making regular visits to food pantries. “There’s a lot of insecurity,” Cazares says.

General Electric has made an art of insecurity. It is, says the New York Times, “regarded in many management circles as America’s most admired corporation.” On the cusp of 2000, Fortune named CEO Jack Welch, a ruthless megalomaniac, “management revolutionary of the century.” Before Welch aborted his well-publicized retirement to make one more big deal, Time Warner paid him $7.1 million for his memoirs, adding to the trove of books offering tips to business climbers eager to emulate his success. No other company has ever posted a year-end profit even close to the $12.7 billion GE piled up in 2000. In polls, consumers recognize its name more widely and think more highly of it than they do any other corporation. They also know almost nothing about it.

They associate it with making things–light bulbs, refrigerators–unaware that its chief business is debt. Over the past two decades GE has transformed itself into the biggest nonbank financial corporation in the world, the biggest owner of planes and vehicles and credit-card debt. Between 1982 and 1997 (a time when American household debt reached previously unimagined heights), GE increased the value of its shares 1,155 percent. It did this while expanding its financial services department and discarding about half its US manufacturing work force. It has moved production offshore, also engineering, and lately gave an ultimatum to its US suppliers, companies that sell it everything from screws to heavy machinery: Move operations to Mexico or lose GE’s business. It is a master of mergers and acquisitions, making 125 such deals in 1999 alone and capping 2000 with the $45 billion acquisition of Honeywell, where heads will roll to keep stock prices up. Nor are white-collar and service workers in the GE empire any more secure. With the sinking of Montgomery Ward, 28,000 people lost their jobs; 600 are to be cut at NBC; and though GE’s profits were up 19 percent, Wall Street analysts are saying 80,000 of its workers could be jobless before 2001 is over.

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Workers still speak of “loyalty” and “corporate responsibility,” but as recounted in Thomas O’Boyle’s estimable book, At Any Cost, Welch announced back in 1982 that GE was responsible only to its shareholders and launched what corporate staff called a “campaign against loyalty,” ordering the word struck from company communications. Last summer GE and its unions agreed on a national contract worth $1 billion in wage increases and benefits over three years, but in Bloomington, as in cities across the country where GE still makes things, workers are asking, “What good is a pay increase if I won’t have a job?”

The Bloomington plant, more than a million square feet, sprawls along the city’s industrial strip, Curry Pike. Its warehouse can accommodate whole cargo trains, its workers forklifting through a maze of mighty refrigerators stacked eight high. Inside, refrigerator doors and inner linings and cases as large as thirty cubic feet dangle overhead, pulled along on chains from one floor to another and onto the lines. Almost everything is made by hand or simple machine. At the plant’s easternmost edge is Profile Drive, a token of the town’s debt to the popular refrigerator.

GE’s mass layoff is not the first in Bloomington in recent years, only the largest. Bill Abbott, who works the night shift in the warehouse, drives to work each day following a trail of bad omens. There’s the old Wetterau site, a distribution center for IGA supermarkets that closed in 1997, taking down 114 Teamsters with it. One of Bill’s workmates had made $17 an hour there; its nonunion successor, a division of Sara Lee, pays $8. Across the street a We’re Hiring! sign advertises a temp agency. Catty-corner, the parking lot is padlocked and sprouting weeds at what had been Westinghouse, then ABB tool and die, both union, first one then the other slowly drained of thousands of jobs; the site was finally abandoned in 1999, another 175 workers down. Just past GE is Cook medical supplies, exemplar of the new breed of companies, fiercely antiunion, hiring at just above minimum wage; and Otis Elevator–union, $15.41 an hour, once employing over 1,000, now down to 527 and counting. Along the strip are a dozen firms with smaller parking lots and smaller wages. One of them, Griner Engineering, is exploring possibilities for producing machine parts in Mexico to meet the price demands of its big industrial customers.

Abbott, 37, began working at GE in 1987, hanging refrigerator cases in the paint department. He never marched or spoke out when those other plants closed; or when RCA, which once had the world’s premier production line of color TVs and a work force of 8,000 in Bloomington, got bought by GE, changed hands again, let go of its last 1,100 workers in 1998 and moved to Juárez. He did his job, considered GE Bloomington one of life’s fixtures. Cumulatively, his immediate family has given 112 years to the plant.

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His wife, Jennifer, started there in 1988. Like thousands of other Bloomington workers trying to prep themselves for “the new economy,” she also attends computer classes at Ivy Tech. She’s a little anxious that data entry could wreck her wrists, already puffy and cystic from taping refrigerator cartons–an “easy job”–a thousand times a night. She’d prefer to study nursing, but even as it “downsizes,” GE won’t pay for training in anything not directly applicable to GE work.

Jennifer’s mother, Judy Deckard, started at GE in 1978, in the paint department, and jovially remembers when every part of her face and hair that hadn’t been masked was tinted almond or white or harvest gold. Now she installs handles and trim on the door line at a rate of 198 an hour. Her husband, Alton, worked at RCA from 1959 building TV cabinets–his mother had cut wire there long enough to get insurance for a hysterectomy, and his mother-in-law spent thirty-two years inserting radio cables–and is happy never to have worked at GE. He recalls the one time that Jack Welch visited the RCA plant, mounted a flatbed truck and told his newly acquired workers that there would be layoffs, six or seven hundred, and sure enough, there were.

Bill’s sister, Fonya Chinn, and her husband, Scott, worked ten years at GE until they saw the handwriting on the wall and took lower-paid but more stable jobs. His mother, Mary, was a nonunion housing custodian at the university ($7 an hour) “for 15.981 years” before joining GE in 1988 as an electrical tester ($16.55 an hour). His father, Joe, was among the first workers GE hired, in 1967, and has spent most of his years in quality control.

“When I hired in,” Joe said, “my foreman picked me up that first day, sat me down on the line and showed me how to do the job–every bit of it. Then he let me do it and watched until I got it right. He could do that job as good as anyone on that line. But GE got rid of all the old knowledge. They’re setting us up to fail. Today the majority of foremen cannot do any of the jobs on the line, don’t know what it takes to do that job, have no feeling for what the people are going through.”

For now, the Abbott family isn’t on the layoff list, but what with one thing and another–the mismanagement and the money-worship, the injuries and the noise and the sense that life’s too short to tolerate disrespect–Bill Abbott says, “I can’t stand apart from this anymore. At least I’ll know I put up a fight.”

Until the whip came down, IBEW Local 2249 was like a lot of local unions: satisfied if the wages rose and the grievances got filed and the overtime kept coming. With those certainties shattered, the choice becomes resistance or resignation. The local’s former president Carven Thomas spoke for the latter when he said, “Let me work while I can work. We need to let it go because the jobs are gone.”

Thomas was only following in the tradition of GE’s unions over the period of Jack Welch’s scorched-earth campaign against their members. Since 1991, union representation in GE’s US operations has fallen 14 percentage points. In terms of work force lost, plant figures from 1984 to 1999 read like casualties of war: Bridgeport, 85 percent; Burlington, 100; Cleveland, 95; Everett, Massachusetts, 100; Hickory, North Carolina, 100; Holland, Michigan, 100; Louisville, 53; Lynn, Massachusetts, 64; Memphis, 60; Philadelphia, 69; Pittsfield, 99; Providence, 63; Rome, Georgia, 100; Syracuse, 100; Youngstown, 100. (This is a partial list. Figures like 99, 95, 85 percent represent GE’s penchant for keeping a skeleton crew for maintenance or security; that way it’s not a “plant closing,” and the company avoids paying for severance or retraining.)

For all that experience, each newly assaulted GE local finds itself having to figure out how to struggle as if it were the first. There’s a feeling expressed in Bloomington that the work force may have only begun to bleed. Talking in the parking lot one night after the second shift, workers acknowledged that GE is investing $100 million to build new energy-efficient models there, then noted the opportunity for tax write-offs and the plant manager’s warning that investments beyond that are “ours to win or lose.” Not one of about a dozen workers believed the plant would be open after 2003, when the present national contract expires. “And what’ll you do then?” No one knew. No one had a good word for the International union. About Local 2249’s leadership, they were fiercely divided.

It’s easy to romanticize the rank and file until you meet them. Then they’re as self-interested and unheroic as most people, and as uncomfortable with change, as timid in the face of what they perceive to be an unstoppable force. Decades of business unionism and almost total unfamiliarity with a culture of struggle–few remember the great GE national strike of 1969–have only reinforced what, after all, is very ordinary behavior. IBEW locals lay down when Westinghouse closed, when RCA closed. Local 2249 was ready to lie down too. But a fresh team took leadership, and they are ruffling feathers by asking the extraordinary.

“Why are the 1,800 [whose jobs will remain] not supporting the 1,400? Why were those 1,400 just laying down?” asks local vice president Ruth Ann Vaught, a taut woman formerly on the door line, with a knowing smile and a will that you wouldn’t want to be opposite. “I told them, ‘What the hell have you got to lose? Stand up, be a supporter, fight for your job.'”

Almost as soon as she and president Steve Norman took office, in July of 1999, they were blindsided. New federal energy standards would raise production costs, management said; two Bloomington lines would have to be built in Mexico–unless the union could come up with the aforementioned $65 million in savings. The previous local leadership and IBEW HQ in Washington had known about this but hadn’t bothered to tell anyone. The International hadn’t wanted to take a militant stand in national contract negotiations either. Within the Coordinated Bargaining Committee, which negotiates national contracts covering GE’s thirteen unions, the IBEW was “a reluctant partner” when preliminary planning for the contract was beginning in early 1999, according to a well-placed CBC figure who asked to be nameless. “They didn’t want a public campaign against GE; they worried about retaliation.”

When Norman and Vaught, with no prior experience in such things, began bargaining to save jobs and money, they got no assistance from Washington HQ. “We had to wing it,” Vaught says. Worker committees proposed efficiency measures, production adjustments, changes to reduce injuries (thus lost-time costs) and so on. They calculated these to be worth $188 million. At about the same time, GE was threatening International Union of Electrical Workers (IUE) Local 761 at its “Appliance Park” in Louisville with a similar extortion scheme. There, the union sacrificed 400 jobs, changed work rules and took wage increases as bonuses rather than as additions to the base pay. GE agreed to keep the threatened production line in Louisville. It got no similar concessions in Bloomington, declared only about $40 million of the union’s proposals valid, and now it’s off to Celaya. Local 2249 just didn’t meet the goal, GE spokesman Terry Dunn says, plain and simple, his voice thick with disdain.

In hindsight, maybe Norman and Vaught shouldn’t have played the cost-cutting game. As Richard Segalini, vice president of GE’s appliances division, would later clarify for them, “Cooperation is worth zero dollars.” But they had to choose from among the available options, and the union’s history is such that taking action at the point of production or taking the street weren’t the first things that came to mind. Also, Norman–a longhaired, bearded, self-confessed hothead who’d previously served as president–thought the company was counting on an emotional refusal. Cooperation may be worthless, but a union’s noncooperation can be worth a fortune in corporate public relations.

Every area of struggle creates opportunities, though, and if the cost-savings exercise delayed more aggressive action–and gave managers the benefit of the workers’ knowledge free of charge–it also inspired some collective spirit within the shop. People like Abbott started talking to co-workers, learning about GE, about Mexico, filling notebooks with ideas and recognizing the value of their labor. When the company said they’d come up short, in December of 1999, it raised within them a righteous anger.

It was then that Norman sought help from the community–from Jobs With Justice, the religious folk, the No Sweat! organizers at the university and activist professors. Last March those forces picketed outside the plant. In April Norman put out a memo with the words to “Solidarity Forever” and a kind of manifesto linking GE to Nike, the WTO and the IMF’s mission of “imposing austerity on Mexican workers through no less than seven ‘structural adjustment agreements’…[whose] effect has been the drastic lowering of the standard of living of Mexican workers.” Independently, Abbott and a couple of other workers traveled to Washington for the A16 protest against the IMF and World Bank. At a demonstration against GE in Bloomington on April 29, Abbott wore a suit, marched with veterans and spoke in public for the first time. He’s not alone in expressing a sometimes contradictory mix of union radicalism, nationalism, loyalty betrayed and sprouting internationalism. Vaught cuts to the chase for members who might be confused or worse about Mexican workers: “They’re not taking your job, brother. They’re not taking your job, sister. The company moved there; they’re just applying for a job. When GE called you, you went because you needed a job. And I have a problem with workers working in a shop for almost nothing, in unsafe conditions and then going home to a shanty shack because they have no alternative.” It’s not just GE that’s at issue; it’s the Mexican minimum wage of $3.75 a day that makes GE’s wage of $2 an hour seem fabulous.

But confrontation is unsettling. For every Bill Abbott there’s at least one worker like the woman who told me her fight was not with GE but with Steve Norman for riling people up, and more who are just passive or afraid. It’s an object lesson in the difficulty of building solidarity even in one union, let alone nationally and internationally.

In July the GE national contract, which brought a lot of money but no substantive gains on job security, was approved overwhelmingly in Bloomington, as elsewhere in the country. The local contract, which covers plant conditions and procedures, was rejected overwhelmingly. The 1,400 jobs were not expressly on the table but figured into the union’s resolve. The No vote meant going back to the table, and because management had insisted its offer was final, there was the possibility of a strike. But soon after the vote, the IBEW district representative told Norman and Vaught that union HQ in Washington had been getting calls from members of the local complaining they hadn’t understood the issues. Norman was ordered to take a second vote. If he didn’t, he says, the International “made it clear that they wouldn’t sanction a strike. That means it would have been an illegal strike; I wouldn’t do that to my people.” Second time around the local contract passed narrowly.

What happened? Maybe people hadn’t been prepared well enough. Maybe they pondered the prospect of a strike and got scared. Maybe the International, which isn’t in the habit of supporting strikes, got scared. But by ordering a revote–and presenting no evidence that it had, in fact, been inundated with complaints–the International undermined the local leadership. Now the bitterness in the plant between those who supported Norman and those who didn’t is sharp, presenting the fighting side with one more formidable hurdle. Bobby Roberts, head of the International’s manufacturing division in Washington, referred questions on Local 2249 to the vice president of the sixth district, Jeremiah O’Connor, who said there was nothing unusual about interference from on high in local votes, and when I tried to press the conversation, said, “I think you’re bullshitting, lady,” and slammed down the phone.

In situations of mass layoff, every worker is affected. Those out of work or soon to be are suddenly facing an unexpected burden on top of all the familiar ones. Despite a year and a half of threats and announcements to the contrary, GE has now informed the government in writing that technically it “has not shifted production to Mexico” but simply “intends to import from a corporation in Mexico”; thus, the newly jobless are not entitled to training, extended unemployment benefits, relocation and job-search assistance under Title V of the NAFTA Implementation Act. As for the still-employed, those with the most seniority in mothballed production areas are being reassigned to the lines that remain, creating a “bump” that reshuffles hundreds of workers to different jobs–no doubt affecting productivity and perhaps the rate of injuries, already at one a day, according to Vaught. The local is struggling to find its feet: first, to assist those losing their jobs and to counter GE’s latest action; then to create some vehicle to repair relations in the plant, improve communication, educate the membership, build power to defend the remaining jobs before they’re threatened. The militants need to build a base, to take some of the heat off Norman–to transcend, as the labor anthem goes, “the feeble strength of one.”

There are building blocks for a labor/community coalition: Jackie Yenna, president of the White River Central Labor Council and an assembly worker at GE, has a formal relationship with the local head of Jobs With Justice, and Norman has been talking with people from JWJ nationally and with GE militants elsewhere. There are bigger dreams of solidarity. “If the Mexicans are going to make our product, at least we ought to help them fight for the same benefits,” says Abbott, who was just voted onto the local’s executive board. “It’s probably pie in the sky to say we could unionize them, but that’s what I’d like to see. But, hell, first we’ve got to organize our own members.”

What will it take to match fire with fire at GE, not just in Bloomington but everywhere? Twenty years ago, Jack Welch openly articulated a strategy for taking the company to where it is today. The GE unions never developed a parallel strategy, and 100,000 lost jobs later, most of them still haven’t shed their faith in what the AFL-CIO likes to call “high-road capitalism.” During the 2000 national contract talks, Robert Thayer, the Machinists’ representative on the CBC, was trying to convince the company to agree not to interfere in future unionization drives, arguing that “a contract is a partnership, not a hindrance.” To which the company coolly asserted, “GE has never been neutral and doesn’t intend to be neutral.”

Now that Welch has said, “Ideally you’d have every plant you own on a barge,” the Internationals are beginning to wake up to the fact that they need to be truly international, in orientation and method. For the first time the CBC is undertaking longer-range planning for internal education, outside alliances, international solidarity that goes beyond talk. Coordinated action might deter workers from undercutting one another, both at home and overseas; might develop tactical instruments for mutual aid; might, through public campaigns, strike at one of the company’s vulnerabilities: its obsession with the “GE brings good things to life” image. Last fall the IUE merged with the Communications Workers of America, one of the few unions with the resources and expressed desire to take on multinational capital. CWA vice president Larry Cohen says, “The next stage of industrial unionism is community-based unionism. We’ll build organizations among workers and our allies all over the country and even internationally. And wherever Welch lands his barge, we’ll be there to greet him.”

It’s in places like Bloomington, though, that the long road to solidarity comes clearest into view. Mayor John Fernandez is probably right that the layoffs will not jolt the city financially; most of the workers live in small towns in surrounding counties, which will take the hard hit. In Linton, thirty-five miles southwest, a GE motors plant made refugees of 135 workers when it shut down in 1994. Some commute to Bloomington and will soon be on the move again. Amid Linton’s empty storefronts and struggling shops, a GE Appliances store sells Bloomington’s refrigerators and Louisville’s washer-dryers. The saleswoman’s husband had worked at GE; he now travels forty-five miles to a job in Terre Haute and refuses to allow any GE products in the house. Ruth Ann Vaught insists, “What we need is a coalition of all the GE unions–and all the unions everywhere in the world, actually–saying, ‘This is labor; these are our jobs.'” But unions from Bloomington or Louisville or anywhere else didn’t surge to the side of the Linton workers, and for now Vaught and Norman and the rest of 2249’s smart, tough fighters will have to invent their own united front–in-plant, in-community, even cross-border. “This is not easy,” says Jeff Crosby, who heads the North Shore Labor Council and IUE Local 201, representing GE workers in Lynn, Massachusetts. “We have to move from ‘I am my brother’s keeper,’ to ‘An injury to one is an injury to all,’ to ‘Workers of the world, unite!'”